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CFPB Director Meets with El Paso Area CUs
Friday, July 18, 2014 7:00 AM

On Wednesday, representatives from the Cornerstone Credit Union League and a group of El Paso area credit unions met with Consumer Financial Protection Bureau Director Robert Cordray and his staff to discuss the impact of recent regulatory changes by the Bureau on credit unions. The forum was part of several roundtables in the El Paso area with different groups to discuss issues pertaining to the CFPB’s operations. 

Much of the discussion centered on “pain points” with the Dodd-Frank Act implementing regulations, especially the new Ability-to-Repay and Qualified Mortgage Rules. Cordray inquired as to the specific staffing issues at each credit union, and how each credit union incorporated the changes into their operations.  Several of the credit union indicated that they would continue to write non-QM loans, due to many members being unable to qualify for loans under the QM rules. Cordray expressed support for non-QM loans, as many lenders have shifted to only issuing QM loans due to perceived risks.

Cordray also addressed the issue of remittance transfers, and how the CFPB believes misinformation about the new requirements convinced many smaller entities to leave the market.  Several of the credit unions indicated that they no longer provide remittance services as a result of the rule, due to vendor issues and possible risk in the error resolution process. Cordray expressed confidence that credit unions could continue to provide remittances under the new rule, and would lend the CFPB’s assistance in working with vendors to fix remittance issues.  He stressed the importance of financial entities in the remittance process, whose departure might force members to look to less reliable services for remittances.

Overall, Cordray praised credit unions for their efforts to assist low income persons, especially those around El Paso, in providing much needed financial services.  He encouraged credit unions to continue to be a market leader in providing short-term, small-dollar loans, as a preferred alternative to more predatory payday lenders.  With the CFPB assuming regulatory authority over non-banking entities, including payday lenders, he also asked that credit unions partner with the CFPB in reporting any abusive practices by these companies.  

Cornerstone appreciates El Paso area credit unions, the CFPB, and Cordray and staff for participating in the roundtable.